Group says Colorado unemployment funds could run out
December 16, 2008
DENVER ” A work force advocacy group says Colorado’s fund for unemployment benefits is in danger of running out if the recession gets worse.
The Washington, D.C.-based National Association of State Workforce Agencies said Monday Colorado’s fund is fine now but “not far away from peril.”
The group said Colorado has an eight-month reserve in its jobless insurance pool and noted Michigan and Indiana had to borrow money from the federal government when their funds ran out.
The Colorado Department of Labor and Employment disagreed with the group’s assessment.
“The trust fund is not going to go broke in eight months or even in one year or two years or three years,” said Mike Cullen.
Payouts from the fund are expected to reach $360 million this year, up from $240 million last year. The fund had $670 million at the end of October.
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Next year’s claims could reach $500 million, Cullen said.
He said taxes paid by employers should keep the fund solvent even if reserves drop. He said the recession years of 2001-2003 did more damage, with the state’s fund dropping to $8 million.